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Govt to announce scrappage policy shortly: Nitin Gadkari

The Minister said he has already taken up the matter of a GST rate cut on vehicles with Finance Minster Nirmala Sitharaman.

, ET Bureau|
Last Updated: Sep 12, 2019, 07.02 AM IST
Gadkari was speaking at the launch of Honda Motorcycle & Scooter India’s Activa 125 BSVI priced between Rs 67,490 and Rs 74,490 (ex-showroom, Delhi).
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NEW DELHI: Road transport and highways minister Nitin Gadkari said the government is working on a vehicle scrapping policy and will announce it shortly.

“The policy is in the works. It has to be cleared by the finance ministry. There are some issues which have to be resolved with state government and stakeholders. It will be announced shortly,” Gadkari said on Wednesday.

He said apart from scrappage centres for commercial vehicles and passenger cars, industry stakeholders should also look at setting up such units for dismantling old twowheelers.

The minister said he has already taken up the matter of slashing goods and services tax (GST) rates on vehicles with finance minister Nirmala Sitharaman.

“Any decision to cut rates will be taken by the GST Council, in which both the central government and the states governments are stakeholders. The ball is in their court,” said Gadkari. The GST Council is scheduled to meet next on September 20.

In response to a query from media persons, Gadkari said the finance minister’s reasoning that millennials’ preference for ride-hailing services such as Ola and Uber had hampered demand for automobiles had been misinterpreted. “What the minister meant is that this is one of the many reasons affecting auto sales,” he said.

Gadkari assured the industry of government support to tide over the crisis.

He was speaking at the launch of Honda Motorcycle & Scooter India’s Activa 125 BS VI, priced at Rs 67,490-74,490 (ex-showroom, Delhi). The BS VI-compliant version is Rs 6,000-8,000 costlier than the BS IV variants. HMSI will subsequently convert all other models in its portfolio to meet the enhanced emission norms by the end of this financial year.

Automobile sales in the country recorded their steepest fall in nearly two decades last month, down 23.5% year-onyear to 1.8 million units. The industry has been urging the government to reduce GST on automobiles to 18% from the current 28% to boost demand.

Yadvinder Singh Guleria, senior vice-president (sales and marketing) at HMSI, said: “The start of the festive period with Ganesh Chaturthi in Maharashtra and Onam in Kerala has been a washout.” HMSI currently has inventory of 45 days and the company is hoping that retail demand will pick up in the coming days and normalise inventory levels. The usual inventory level in the industry is about a month.

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